The question savvy investors must ask is: Where are the next areas two and six? Investment real estate expert, and California native, Monte Davis says, “I am putting my money into area three and area five…that is where we are directing our investors.”
Like area six, areas three and five used to be less desirable Austin locations. But as land values rose and urban professionals moved in, the market began to change. Investors began to seek more affordable properties across the I-35 dividing line between the affluent neighborhoods in area four and the less privileged regions located in areas three and five.
What caused the east Austin buying trend? “It was the last affordable piece of land within a close proximately to downtown Austin,” says Davis. “When the prices topped $300 a foot in area four and the adjacent areas were on the upswing, there was simply no place to go but east.” Offering affordable investments near downtown the gentrification of areas three and five is underway. Now is the time to invest. Homes in these areas were built in the 50’s and 60’s, so investors should be prepared to spend a few thousand in flooring, paint and other cosmetic improvements.
While appreciation is strong, gaining a positive cash flow in areas three and five will be more difficult than it was a few years ago. The investors we work with typically start with a 20 percent down payment, and most are either breaking even or carrying a slight negative. However, with the current rate of appreciation, our investors more than recuperate the negative. |
